More help coming for small Alberta distillers as government reduces mark-up

The Eau Claire Distillery in Turner Valley JEFF MCINTOSH / THE CANADIAN PRESS

The NDP government is giving Alberta’s small-scale liquor producers a break in a way it believes won’t land the province in a new trade dispute.

Finance Minister Joe Ceci announced Friday the government will reduce the Alberta Gaming and Liquor Commission mark-up for small distilleries, cideries, meaderies and cottage wineries when they sell their product out of their own facilities or at farmers or artisan markets.

The move, effective immediately, will cost the province about $1.4 million, but Ceci said it will help to foster the industry in Alberta.

“Business owners … are going to invest in their business, hire staff, expand production, grow their production lines,” said Ceci in a phone interview after making the announcement at Turner Valley’s Eau Claire Distillery.

The change sees the mark-up for spirits reduced from $13.67 a litre to $2.46 a litre when the products are self-distributed. For ciders and coolers, the mark-up is cut from $1.81 a litre to 32 cents a litre.

The mark-up remains the same for products sold through liquor stores.

In his provincial budget speech this spring, Ceci promised help for Alberta’s small distillers on a model similar to that in place for craft brewers in the province.

But that program, which sees small brewers eligible to receive a grant from the government, has come under fire. In July, a three-person panel ruled that the Small Brewers Development Program does not comply with the province’s free trade obligations under Canada’s Agreement on Internal Trade.

The province has appealed that decision and Ceci said the government stands by the program.

The program for small liquor manufacturers does not involve a grant, however.

And the finance minister said he doesn’t expect any problems for the new program.

“We’re on firm ground,” said Ceci. “When you look around, other provinces and territories are doing this very similar program and they’ve not been challenged.”

There are 21 small liquor manufacturers — categorized as those that produce under 1,500 hectolitres of spirits — in the province.

David Farran, president of both Eau Claire Distillery and the Alberta Craft Distillers Association, said he expects trade considerations stopped the government from launching a grant program.

But he said small liquor producers are “thrilled” with the government’s announcement on Friday.

Almost all small distillers sell extensively from their own facilities or at farmers markets, said Farran.